4.	IMPAIRMENT

Beginning in fiscal 2015, the Company began working with a third-party to develop an integrated direct-sales order system. This system was to be used by the Company’s independent sales consultants to assist them in order processing, payment collection, genealogy tracking, commission reporting among other features. Our sales consultants started using the new system during the third quarter of fiscal 2017.

During the fourth quarter of fiscal year 2017 it was concluded that the system was not fulfilling the needs of the direct-sales program. Management evaluated various alternatives, but ultimately concluded it was necessary to abandon the system as it became clear the third-party developer would be unable to get the system to operate as originally intended. As a result, we reverted to our original web-based proprietary system and recognized an impairment loss of $1.1 million, as it was determined that the system had no fair value as a result of being abandoned.